Live Happier on the Money You Have

How much money you make isn't nearly as important as how you use it, according to Elizabeth Dunn and Michael Norton, authors of the new book Happy Money. In fact, they say, once you get to $75,000 a year, a bigger paycheck has no impact on day-to-day bliss. So smile, and follow their proven rules for how to be happy with less money.

Shell out on friendships

Shell out on friendships

Research shows that our best moods often come when we're spending time with family and friends. "Yet when many people are saving up for something major—a car, a computer, a TV, whatever—one of the first things they'll cut back on is socializing," says Dunn. "They'll say, 'I'd like to go out with you guys Friday night, but I'm saving up.' Putting money away is a very positive goal that correlates to happiness, but when your route limits time with friends, you need to think about whether that's a worthwhile trade-off."

Splurge on experiences, not things

Splurge on experiences, not things

A decade of research tells us that purchases affect our happiness in ways we don't expect. "Most of us think, Gosh, if I had limitless money, I could buy what I want, and I'd be happy," says Dunn. "But it doesn't work out that way." There's almost no scientific evidence, for example, that buying a home—or a newer, nicer one—increases joy. In fact, in one study that tracked how spending leads to happiness, researchers found that only one type of purchase had any impact: what they label "leisure," i.e., things like trips, movies, and tickets to sporting events and concerts.